U.S. Customs and Border Protection

GSP Renewal

Once again, renewal of the Generalized System of Preferences (“GSP”) program is coming up before the U.S. Congress.  Even though, the GSP program has never not been renewed, each time it comes up for renewal, there is hand wringing and a great to do about whether it will be renewed.  This time the program is scheduled to expire on December 31, 2009.  In a September 28, 2009 letter to the House Ways & Means Committee and the Senate Finance Committee, a group of 49 companies and trade associations, called on the leadership of the respective committees to quickly renew GSP. 

On the Senate side, Senator Charles Grassley (R-IA) is pushing for reforms to the GSP program, prior to renewal. However, as of this date, with only a handful of legislative days left on the Congressional calendar, it is extremely unlikely that any changes will be made to the GSP program.  In my view, the program will be renewed at the last minute, as a rider to some other key legislation that must pass before Congress adjourns this year.  There is no reason for hand wringing over renewal of GSP.

This has been a program that WIMA has supported for the past thirty years.  I will look into our joining the letter of support for renewal of GSP.

Alan Bersin Nominated to Serve as CBP Commissioner

On September 29, 2009, President Obama nominated Alan Bersin, who currently serves as Assistant Secretary for International Affairs and Special Representative for Border Affairs, at the Department of Homeland Security, to be the next Commissioner of Customs and Border Protection (“CBP”).  Jayson Ahearn, a career employee at CBP, has been serving as Acting Commissioner since Ralph Basham stepped down as Commissioner after Obama’s election as President.

Bersin has more of an enforcement background than a trade background and his nomination has already received some criticism for that reason.  He previously served as a U.S. Attorney for the Southern District of California and chaired the San Diego Regional Airport Authority.  It seems to me that someone that enforced has federal laws as a U.S. prosecutor is eminently qualified to head up CBP and enforce our Customs’ laws.  Of course, in this town, there are far more detractors than cheerleaders. 

I expect Bersin to be confirmed by the Senate by the end of the year. He is well qualified and he has already passed Senate scrutiny in his appointment to the Department of Homeland Security.


Office of U.S. Trade Representative

Canada Seeks Waiver from Buy America Rules

Our largest trading partner, Canada, is seeking a waiver from the new Buy America rules in the U.S. economic stimulus package.  The concept is that Canadian firms could compete for U.S. federal procurement contracts funded by the recent stimulus package.  In return, U.S. firms would get guaranteed access to Canadian provincial markets as long as the U.S. stimulus package is in effect.

The likelihood of this happening, in my opinion, is about 5% -- probably less.  The U.S. labor unions vehemently oppose the waiver and will more than likely carry the day.  If there is any exception to the Buy American rules, it will likely be on a product by product basis, not a complete waiver for all products and services.  One wag noted that the total value of all Canadian provincial market contracts may be less than one U.S. federal contract. Still, it is an interesting issue, and highlights how closely the economies of the two countries are aligned. 

The issue was the mentioned in USTR Ron Kirk’s press conference on October 5th,
but I think it is unlikely to move very quickly.  I will report further on it in the next trade update.

U.S. Department of Commerce

July and August Trade Exports Up

The Census Bureau of the U.S. Department of Commerce reported that July exports of goods and services were up 2.2% over June exports, the largest increase since June 2008.  And August exports were up again slightly over July exports (.2%).  So, hopefully, we are starting to turn the tide on the economy.  And while imports remain much weaker than a year ago, imports are also slowly starting to increase. It is always interesting to watch these two numbers.  I will continue to report on them in upcoming trade updates.